Agricultural Investment, Agricultural Value Added, and Economic Growth in Algeria: An ARDL Approach with Structural Breaks (1995–2024)

Abstract

Objectives: This study assesses whether agricultural investment and agricultural value added are associated with economic growth in Algeria during 1995–2024. Prior Work: It builds on growth theory, agriculture-growth studies and evidence on resource-dependent economies. Approach: Annual data are analysed using autoregressive distributed lag bounds testing, an error-correction model, Bai-Perron structural-break analysis and robustness checks for the 2017 break and the pandemic shock. Results: The variables are integrated of order zero or one. Baseline cointegration is weak, but the 2017 break improves the specification. After accounting for the 2017 structural break, agricultural investment has a positive and statistically significant short-run effect (at the 10% level) and the bounds test supports cointegration at the 5% level; its long-run coefficient, however, is not statistically robust. The growth contribution of agricultural investment therefore operates mainly through short-run dynamics and appears conditioned by investment quality rather than expenditure volume. Implications: Policy should emphasize investment efficiency, productivity transmission and value-chain integration rather than expenditure volume. Value: The paper integrates structural breaks and shock-sensitive robustness checks into a country-specific assessment of Algeria’s agriculture-growth nexus.